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CPEC as a Linchpin of China-Pakistan relations

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CHINA-Pakistan Economic Corridor (CPEC) is a unique mega project having multidimensional effects on socio-economic development not only in Pakistan and China but in the whole region. About four years and four months ago, when the idea of building CPEC was announced by Chinese Prime Minister during his visit to Pakistan in May 2013, many of us did not visualize its importance for consolidation of Pakistan-China strategic partnership. Today with the changing regional and global dynamics, the vitality of CPEC as binding force of Pakistan-China relations has enhanced manifold. On 20 April 2015 (two years and four months ago), Pakistan and China signed an agreement to commence work on CPEC with the initial cost of the $45.6 billion which today has reached to $62 billion. The progress on the implementation of various projects under CPEC, such as development of Gwadar, energy projects, transport infrastructure and industrial cooperation, has been quite significant. In June 2017 the Deputy Chief of Mission at the Chinese Embassy in Islamabad H.E Zhao Lijian opined that CPEC was one of the best performing projects of China’s Belt and Road Initiative (BRI). He noted that 19 early harvest projects of CPEC worth $18.5 billion were making smooth progress towards completion.
CPEC is considered critical for the future development of China–Pakistan relations. The project is so significant that China has included it in its 13th five-year economic and social development plan (2016-2020). The CPEC is a pilot project of Chinese President Xi’s grand strategic concept of “One Belt and One Road” (OBOR) also referred as Belt and Road Initiative (BRI) comprising six international economic corridors identified as: (1) The New Eurasia Land Bridge Economic Corridor also known as Second Eurasia Land Bridge; (2) The China-Mongolia-Russia Economic Corridor; (3) China-Central Asia-West Asia Economic Corridor; (4) China-Indochina Peninsula Economic Corridor; (5) China-Pakistan Economic Corridor; and (6) Bangladesh-China-India-Myanmar Economic Corridor (BCIM). Being a pilot project of BRI the success of CPEC will have positive impact on the implementation of other five corridors.
Pakistan Economic Survey (2016-17) in Chapter 17 (Annex-III) highlights the importance of CPEC for economic development of Pakistan and the region. It notes that: ‘CPEC is a long term partnership vision of the leadership of the two sides envisaging comprehensive socioeconomic development, peace and prosperity for the region. Research studies suggest that the initiative will substantively boost growth and job creation. It is also expected that CPEC will accelerate urbanization and attract local as well as foreign direct investment in the country through increased competitiveness. The relocation of Chinese industries will bring possible knowledge spillover and technological progress. It is expected to address the issue of poverty and bring hope and better living standards to people across the region. In the short term, the trade deficit is expected to rise as a result of import of machinery and equipment. In the long run, however, it is expected that the current account balance would improve through import substitution and export expansion. The balance of payments position would also improve in the long run as projects under CPEC reach completion.’
Recently on August 23, 2017, Institute of Strategic Studies Research & Analysis (ISSRA), a think-tank of National Defence University organized a very useful national seminar on “Pakistan-China Relations beyond CPEC’. Pakistani and Chinese speakers highlight the importance of CPEC as linchpin of Pakistan-China relations. It was noted that viewing this flagship project in isolation of the overall relationship between the two countries would be a delusion. China’s steady rise as a global giant and convergence of its interests with Pakistan made Pakistan-China relations strategic and multidimensional. China has always appreciated Pakistan’s role in counterterrorism. On recent US policy of pressurising Pakistan to do more in counter terrorism, China’s response was befitting as it defended Pakistan on its role in counter terrorism. Further, China also called upon the United States to value Pakistan’s important role in Afghanistan and respect its sovereignty and security concerns. Maj Gen Muhammad Samrez Salik, DG, ISSRA in his welcome remark highlighted the importance of the seminar. He said that the seminar was geared towards deliberating on avenues of mutual growth and development of Pakistan and China. He said that both countries have realised the importance of their economic cooperation and CPEC has been a major development in this regard. Pakistan and China relations are often defined in proverbial terms as higher than the Himalayas, deeper than the oceans and sweeter than honey. He said that current cooperation between the two countries is the real manifestation of these phrases. He recommended that it was a right time to adopt objective approaches for strengthening economic and strategic cooperation between the two countries.
In the above mentioned seminar, H.E Mr Zhao Lijian, Deputy Ambassador of China in Pakistan, made a presentation on “OBOR: CPEC as a Lynchpin”. He highlighted three important aspects of CPEC: first as a lynchpin of BRI, second as a Lynchpin for Pakistan-China relations and third as a lynchpin for globalization process in the region. He said that CPEC is a pilot project and was given special attention during BRI summit held in May 2017. CPEC is also lynchpin for Pakistan-China relations and would offer great economic opportunities to Pakistan. At the same time he clarified that in economic relation of the two countries, CPEC is not everything. In addition to CPEC projects, China is also working on 300 other projects. He added that CPEC is a win-win project that will benefit both the countries. Moody’s Investors Services projected in April 2017 that Pakistan’s economy is expected to grow by 5 percent over the next two years because of CPEC projects as infrastructure gaps may reduce through increased investment in transportation and power.
Further, he noted that CPEC has accelerated cooperation between the two countries in other fields as well especially in the education sector. China is granting scholarship to about 5000 Pakistani students. He said that there are about 22000 Pakistani students studying in China. He stated that CPEC will play an important role in starting a globalization process in the region resulting in capital and technology flow in developing countries. Presently there is a new trend of globalization in the shape of shifting of industries from one country to another country. The dislocation of industries from China would create 85 million jobs in Africa, South East Asia and South Asia. Mr. Lijian said that CPEC will provide a foundation for industrialization in Pakistan. He added that the progress on early harvest 19 projects of CPEC, mainly the energy projects, is quite good. Out of the 19 projects five projects have been completed and construction of other 11 projects is near completion. About 11000 MWs electricity will be added to Pakistan’s national grid in near future that would not only help in ending load shedding but will also help in restoring industry in Pakistan.
With such prospects and potential, it is beyond understanding why these days there is so much criticism on CPEC in media. Concerns are being raised that it will not be win-win cooperation and Chinese companies would get more benefits than Pakistan and that it will have negative implications for Pakistan’s local industry. Some experts even argue to the extent that CPEC game is over. One may agree that there are some challenges in the implementation of CPEC projects but these challenges are projected in media out of proportion and mostly exaggerated. To address these issues positively Dr Ijaz Shafi Gilani, a senior academician and opinion maker, has introduced an Informal China Study circle in Islamabad to bring together various experts, scholars and researchers having interest in China Studies to exchange new ideas and bringing improvement and revisions in their thought process. The experts at the China Study Circle believe that Pakistani elite is not in favour of CPEC as it is influenced by western media that is mostly in English. Chinese world view and its perspective were not much known in Pakistan and there was a need to translate Chinese perspective into English. Furthermore, they emphasised the need to promote awareness of Chinese geography, culture and language in Pakistan that in return will help in enhancing people to people contracts and cooperation at government-to-government level. Chinese investment of US$ 62 billion in CPEC project along with shifting of industries in Pakistan would provide great opportunities for the development in Pakistan. However, they believe with the western mindset, Pakistan cannot fully benefit from these opportunities.
The top economists of Pakistan like Dr Salman Shah and Dr. Ashfaque Hassan Khan during their talks in various seminars have highlighted that CPEC could acquire great importance for developing global competitive advantage for Pakistan through connectivity, access to markets, skills development, know-how, and transfer of technology and availability of financial resources. The main focus of the government on CPEC is on its hardware/infrastructure development but there is also a need to focus on strategies and policies/regulation which is a software part of CPEC. Further, Pakistan should learn from Chinese experience of high economic growth by introducing reforms in Pakistan’s regulatory and logistic system. There is no doubt that CPEC is win-win cooperation and it will further consolidate Pakistan’s strategic partnership with China.

Article originally published in Pakistan Observer on September 13, 2017.

Disclaimer: Views expressed are of the writer and are not necessarily reflective of IPRI policy.

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IPRI is one of the oldest non-partisan think-tanks on all facets of National Security including international relations & law, strategic studies, governance & public policy and economic security in Pakistan. Established in 1999, IPRI is affiliated with the National Security Division (NSD), Government of Pakistan.


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